It was 18 years ago that Microsoft introduced their initial attempt to move beyond just “project management” and into the world of “portfolio and project management.” Many other players have since joined the marketplace we know as PPM. The introduction of detail planning techniques, other than traditional “waterfall” and the rapid adoption of Agile, in recent years indicates we are approaching another significant market re-definition. Additionally, the consequences of the recent world-wide pandemic are causing real changes in how organizations choose their project investments and adjust to major changes in funding and availability of resources.

No longer can the standard annual budgeting process and PPM tools meet the needs of organizations that have serious revenue constraints, resourcing impacts on their major projects, fast adoption of “work management” tools, and the focus on “products” and “teams” which Agile techniques promote.

The governance processes which most IT organizations have developed and followed have to adopt to these conditions. Just implementation of good PPM processes won’t be enough to handle the very dynamic situation almost every organization faces now. PPM is a key component, but all by itself it can’t solve the problems.

I believe that moving to a comprehensive “enterprise governance” approach will help corporate executives properly tie together their corporate strategic planning, their portfolio/program/project planning and execution, and their end result “products” which programs and project produce. Let’s look at a simple example to illustrate this. Most companies have strategic plans in place (usually several alternate plans), which management uses to guide their budgeting, marketing, and sales efforts. These strategic plans usually have multiple “objectives” such as “higher asset utilization” or “reduction of operational costs.” Then, those strategic objectives might have several “goals” such as “reduce 2021 labor costs by $450,000” and/or “reduce 2021 non-labor costs by 8%,” for example. The goals may not just be a single value, but the cost reductions noted might be time-phased by quarter.

If this example of corporate strategic planning is how the executive team thinks, here is why simply implementing PPM will not be enough:

• The strategic plans/objectives/goals are not “projects.” Attempting to define these items as projects is doomed to fail. These items do not have tasks or other attributes of detail planning. Many organizations currently define these attributes of strategic planning using spreadsheets and do not integrate this information with their PPM tools.
• Most project plans result in a “product.” This “product” could be some actual product to be sold to external customers, or it may be a “release” containing enhanced or new “features.” These product features and releases almost always are, themselves, time-phased.
• What happens when a project is late? How does that slippage affect the “products”? How might it affect the strategic goal of reducing non-labor cost by 12 % in the 3^rd quarter?
• How does the organization handle a situation, which has become very common recently due to the pandemic, where a company must change their strategic objectives and goals? What is the effect on the projects underway and the products to be delivered? How is the PPM system and processes based on that system affected?

Several major PPM vendors, particularly those who promote Agile techniques, have now moved to “product management” in place of PPM. While that sounds good, it really is not the best solution. Agile certainly is becoming a more common technique, but there is still a demand for Waterfall methods, which are the basis of Microsoft Project. Senior management in most organizations still has a Waterfall mentality when they address budgeting, for example. While moving to “product management” can help, it still leaves out integration with strategic planning and execution.

I suspect that looking at this common situation presented as an Enterprise Governance process will produce success. Enterprise Governance has three major components:

• Strategic Planning and Execution
• Project Portfolio Management
• Product Management

What is needed is to address each of these three components in an integrated fashion? Let’s look at what each requires in the following paragraphs.

 

Strategic Planning and Execution

The main functions needed are:

• The ability to define a strategic plan. Multiple strategic plans should be supported since corporate management many times needs to evaluate changes when external events occur. The current pandemic situation is an example. Strategic plans should have lower level components of strategic objectives and strategic goals, and these should be able to have time-phased attributes for resources, costs, and even quantity. An example of the latter might be “reducing warehouse space by 15 % 3^rd quarter of next year.”
• Support investment planning and alignment of such to the established strategic objectives and goals.
• The ability to show the realization of the desired business outcomes. This where the strategic planning and an execution component requires a tight integration with PPM and Product Management.
• The ability to analyze and evaluate multiple scenarios or simulations.

 

Project Portfolio Management

We are all familiar with the basic PPM requirements. But I would like to emphasize a few functional areas that many times are overlooked:

• PPM cannot be just about major projects. It is still true that major projects do not consume most of the resources and costs in an IT organization. Research by the leading industry analysts consistently has shown that major projects account somewhere in the range of 24-35 % of the total IT work. Operational efforts typically consume more than half of the total resources manhours.
• The move to Agile techniques must be addressed by the PPM system, and few IT organizations are “totally Agile.” PPM should be able to handle projects which are “hybrid” with a combination of Waterfall and Agile methods being used.
• PPM should be able to allow project managers to use more than one detail planning tool. It should not be a requirement when implementing PPM that every project be planned with one specific tool. The bottom line is that, no matter what detail planning tool is used, a resource assignment is defined. A resource could be assigned to a task, a deliverable, a backlog item, an issue, etc. The PPM system should handle this without requiring that everyone uses the same standardized tool. One of the main reasons many PPM implementations fail is that the system required mangers who do the detail planning to switch from a tool they had been used to using for years.
• It is very common for an organization to have multiple detail planning tools being used such as:
  • Microsoft Project
  • Microsoft Planner
  • Azure DevOps
  • SharePoint lists
  • Excel
  • Another non-Microsoft tool like Jira or Rally for an organization with a lot of Agile experience
• It’s also critical that PPM handles financial management. In both a “top-down” and “bottom-up” fashion. PPM should allow the annual budget for a major program to be established when perhaps only two of the projects for that program currently have detailed schedules and budgets. As another project in that program comes onboard, managers should be able to see “what’s left?” of the program budget compared to the rollup of the projects currently budgeted.
• The ability to define a strategic plan.
• PPM components also must consider how to integrate with a concentration on “work management” or “work execution.” That is something that should be integrated with the PPM system and processes, but not a replacement for PPM. Work management tools do very well by coordinating the team involved in a single project. They enable better project management on a project by creating a “collaboration” space and improving communication. In the past 20 years, several vendors introduced what they called PPM systems which used the “better project management by better collaboration” approach. Most of those vendors have disappeared! Work management is not a substitute for good PPM. Both work management and a good PPM are needed, and they should be integrated.

 

Product Management

I believe that simply switching from a project centered approach to a product centered approach is not the answer to dealing with the introduction of Agile. Product management requires its own unique functions:

• In the case of a physical product which is being produced to be sold in the marketplace there will be some attributes like:
  • Potential revenue to be produced which will always have some time-phased value like “sales in year 1, 2, 3, etc”
  • Production costs
  • Comparison with competing products
• For both physical products for sale and products which are to be delivered internally, such as a payroll system enhancement, most organize around “features” and “releases.” This is one of the principle reasons organizations have moved to Agile techniques. Your product management system must allow features and releases to be defined and managed.

 

In summary

I’ve outlined above the basics of an approach to enterprise governance. All three functions (Strategic Planning and Execution, PPM, and Product Management) are essential. What is critical is that all three must be integrated. The impact of a project delay must be easily shown on the corporate strategic objectives and the product plans. When there is an update to a strategic plan, all projects and products affected must be identified and evaluated. Learn more about Enterprise governance by watching my on-demand MPUG Vendor Showcase session.

 

The above article is a sponsored contribution. We thank Triskell Software for being a community sponsor of MPUG.